Voor de Zwarte Ridder (uit 2016)
GOLD AND SILVER FUTURES
It is widely reported that in today’s gold and silver futures markets, many times more gold and silver ounces are traded than actually exist. Let’s say an ounce of silver is $20. Because I am so sure that ounce of silver is going to be $30 in 3 months, I am willing to bet on that belief. So, I go to the owner, and say, I will give you $1 today for the right to buy your $20 dollar ounce of silver for $25 dollars in 3 months. The owner thinks about it and figures if silver never makes it to $25 an ounce the option to buy for $25 expires and the owner makes a buck and keeps his ounce of silver. If silver goes to $30, as was my bet, the owner has to deliver me that ounce of silver in exchange for $25 of my dollars.
When all is said and done and assuming the price of silver indeed rose to $30 an ounce, I have paid $26 for a $30 ounce of silver and the owner has earned $6 on his ounce that was worth $20 at the time we entered into our futures contract. All in all both sides took advantage of rising silver prices.
Where it gets a little shady is when 100 investors vie for the same $20 ounce of silver and in the end they all want to take delivery. OOOOPS!
Reportedly this is a regular occurrence in the gold and silver futures markets. To the average investor this sounds like fraud. Charges of such may be arguable but so far have been avoidable. When the situation described occurs, sellers simply offer to settle the trade with $4 of cash for each ounce sold. No physical delivery required.
Theoretically, this charade can play out indefinitely even if no physical silver ever exists. As long as investors are willing to settle in cash at the end of a contract, who needs silver? It’s not until investors stop accepting cash settlements and demand physical delivery that things can get a little dicey. When that day comes and delivery is refused, investors will suddenly realize they have been investing in the tall shadow cast by a very short stack of coins.